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AMD receives some much needed cash from the Middle East

Things haven't been going AMD's way ever since the acquisition of ATI Technologies in 2006. The company has been assaulted by Intel's Core-based processors in the desktop, server and notebook markets and its graphics offerings still are outgunned by NVIDIA -- even with the newly introduced Radeon HD 3870 and HD 3850.

As a result, the Sunnyvale, California-based company has been taking a beating as most recently observed in its Q3 2007 earnings report. AMD recorded a $226 million USD operating loss and $396 million USD net loss on revenue of $1.632 billion USD. $78 million USD of the loss was attributed to AMD's ATI acquisition.

However, things may finally be looking up for the company. Mubadala Development Company, a United Arab Emirates (UAE) government-funded investment firm based in Abu Dhabi, has acquired an 8.1 percent stake in AMD for $622 million USD. The company received 49 million shares at a price of $12.70. Despite the buy-in, Mubadala will not receive any board representation as a result of the deal.

AMD will receive a total of $608 million USD after repaying Mubadala $14.6 million USD in expenses. AMD plans to use the cash to invest in "research, product innovations and manufacturing excellence." The Business Review reports that some of the funds will be channeled into a $3.2 billion USD chip plant on the Luther Forest Technology Campus in Malta, NY.

"We proudly welcome Mubadala, a world-class investor, to the AMD shareholder family," said AMD Chairman and CEO Hector Ruiz. "This investment strengthens AMD’s ability to deliver customer-centric innovation and choice to the marketplace, creating greater value for all of our shareholders."

For its part, Mubadala's CEO and Managing Director, Khaldoon Khalifa Al Mubarak, added "AMD is a great fit for Mubadala's investment approach -- a spirited competitor and innovator led by a strong and visionary management team. We see significant opportunities for long-term growth and value creation."

Mubadala has been spreading money around quite frequently in recent months. According to Bloomberg, the investment firm captured a 7.5 percent stake ($1.35 billion USD) in the Caryle Group. Some of Mubadala's other investments include Ferrari SpA and SR Technics.

The investment from Mubadala couldn’t have come at a better time for AMD. AMD has faced an incredible amount of debt and not only record losses in Q3 as previously mentioned, but also during Q1 and Q2. The company has also seen the departure of two former ATI executives -- CEO and President David Orton and vice president of worldwide sales Rick Hegberg, as well as executive vice president and chief sales and marketing officer Henri Richard.

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Arab government???
By knowom on 11/16/2007 3:51:19 PM , Rating: 1
Gee can't wait for those new oil powered cpus! Think I'll stick to Intel for awhile besides it's better anyway and I'm not a fanboy I'm just practical my last cpu was a AMD. Intel pretty much has me and a million others by the balls as it is who's gonna pass up going from a dual core to quad core from a mere single chip upgrade.

RE: Arab government???
By sj420 on 11/16/07, Rating: -1
RE: Arab government???
By overzealot on 11/18/2007 8:47:20 AM , Rating: 2
The people that know that quad-core isn't going to be used for a few years (try 3-6 years, maybe even 8.

What about the people who are using their quad-core quite efficiently now? Video encoding/decoding, a few games (ET:QW, Supreme Commander, Solitaire - just kidding), or people that just run a lot of crap all the time benefit from the extra 2 cores.

Just because you wouldn't find it useful, doesn't mean no-one will. Personally I think the Q6600 is great step-up for people with 1066FSB rated mobos.

RE: Arab government???
By Hawkido on 11/16/2007 5:32:25 PM , Rating: 5
AMD's new product line-up:
Strap-on CPU vests
Improvised Electronic Devices (IEDs)
and the return of the Allah-in-One Video Cards

RE: Arab government???
By Treckin on 11/16/2007 6:46:22 PM , Rating: 2
hahaha! That needs a +6...

Where Kris when you need him?

RE: Arab government???
By KristopherKubicki (blog) on 11/16/2007 6:55:49 PM , Rating: 4
LOL well -- the UAE is extremely progressive for that area. Not to mention fairly pro-America too. The OP gets points for creativity, but just missed the mark a little :)

RE: Arab government???
By FangedRabbit on 11/18/2007 1:44:12 PM , Rating: 2
OMG, the Allah-in-one video cards killed me. +6

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